First, I send our deepest sympathies to all affected by the horrific and shocking shooting and killing in Austria. Our thoughts are with all those who have been killed, their families and relatives. The reforms announced today of the rental sector will strengthen the rights of new and existing tenants in Irish society. That is a central part of the reform. Those reforms have been informed by the Housing Agency review which, of course, stemmed from the Housing Commission report which the Deputy opposite endorsed at the time. All of the parties opposite endorsed the Housing Commission report which pointed to the need for reform of the rent pressure zones. The Deputy opposite and the Sinn Féin party are very disappointed with the announcement today. They condemned it in advance of seeing the detail. Now they have changed tack hurriedly. Last March I was told we were going to get rid of RPZs all together.
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Every one of you said it and we are not.
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We are not. What we are doing is extending it. It is becoming a national framework now in terms of rent pressure zones.
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The evidence has pointed to those areas outside rent pressure zones being under pressure because of that very fact so we are correcting that in terms of making it a national protective framework. Existing tenants' rents are capped at 2%.
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The Deputy knows that but she says the opposite here. She just tells untruths with abandon-----
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With abandon---
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Existing tenants' rents will be capped at 2%.
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That is the reality of it and for those with four tenancies and above, there is an effective end to no-fault eviction.
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That is the bottom line and yet Deputy McDonald comes in, all sound and fury. To a certain extent, there is an incredible incoherence in terms of Sinn Féin policy on housing. Deputy Ó Broin, as the Sinn Féin housing spokesperson, will meet all of the property interests. I have a list again of who he has met lately. On 30 April, Property Industry Ireland and IBEC. He meets them. Why?
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For what purpose?
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For what purpose? To introduce incentives for investors to capitalise apartment construction. Deputy Mary Lou McDonald comes in today and says the Government is only interested in institutional investors.
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Her spokesperson has been meeting them on an ongoing basis. Such hypocrisy.
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Such hypocrisy will not cut it with the people. The bottom line is this. This is a balanced set of proposals.
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The Housing Agency report as published had four options. The Government has gone with the option of adapting the existing RPZs because they would expire by the end of the year if nothing was done. This is a strong measure in terms of protection but also in terms of new builds. We need to incentivise future investment in new apartment buildings and housing. I put it to the Deputy that the State is the lead investor at the moment, with €7 billion plus. The Department of Finance is saying that we need about €20 billion to get to 50,000 houses per annum for a sustained period of time. Where do people think we are going to get the €20 billion from?
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Is anybody seriously suggesting that the State will pony up the €20 billion? Sinn Féin says it will triple social housing, triple this and that without telling us how we are going to get the money. This is very fundamental. We need public sector investment-----
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We also need private sector investment and we need to protect tenants. The Minister, Deputy Browne, has done that today with his package. It is extremely disappointing to Sinn Féin because it is not what the party thought it would be.
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Sinn Féin never anticipated that we would end no-fault evictions by landlords with four tenancies. It never anticipated that we would make it a national protection framework because last March the party declared to all and sundry that the Government was getting rid of it completely.
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That is the language they used. It is the language of "exaggerate and exaggerate, tell untruth after untruth and you know what, people might believe us".
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"People might believe us";-----
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-----that is what Sinn Féin is about. What I am about is solutions.
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I am about solutions.
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Sinn Féin is about exploiting the housing problem and crisis to whatever degree possible for its own political advantage.
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The Government wants to increase the supply of houses to get to 50,000 per annum.
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The proposals of Sinn Féin, via rent bans or whatever the Deputy has said, would actually reduce supply. The Deputies opposite have no ideas and no solutions. That is their problem and the people saw that last time out. They do not have solutions because they do not accept there is any role for the market at all.
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That is a fundamental problem in terms of their presentation on this issue.
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I stress again that existing tenants' rent will be capped at 2%-----
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-----and the rent of new tenants in new supply will be capped at the CPI level. The caps are retained. The framework-----
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I did not interrupt the Deputy but this is standard practice for Sinn Féin-----
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-----because Sinn Féin is interested in just throwing untruth after untruth across the House and is not prepared to listen to the truth.
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You are not the leader yet, Deputy.
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You are not the leader.
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The Deputies opposite are into performance; they are not into substance.
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There are two things. First, Fianna Fáil has been in government for five years, not ten. That is a fact. Second, Deputy Bacik said people were briefing at the end of February. They were not briefing. What happened was that I went public and said there would be reform and that there would have to be change. I made a general statement saying that we would have to attract private sector investment. All of the Opposition deliberately distorted that and the Deputy declared that it was the end of RPZs, when ending RPZs was never contemplated. The legislation was expiring at the end of this year. All of the Opposition endorsed the Housing Commission's report. Read it. It said that the Dáil was too reactive and that too many short-term decisions were taken in the last Dáil.
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I did not interrupt the Deputy. He does not own the place. He should have the decency to allow an exchange between me and the Labour Party leader. He has not assumed the status of leader yet and may not for a long time to come.
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The fundamental point is that as a result of these packages, we have a national framework of protection. Existing tenants will keep the RPZ at 2%. If we get new builds, which is what we want to do, new tenancies will be capped at the CPI. The protections from no-fault evictions by landlords with four tenancies or more are very significant, and there are other protections and there will be other safeguards. What is emerging is probably the strongest set of rent protection measures we have ever had in the history of the State.
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That is the reality. If we forget all the noise, the sound and fury and go through it detail by detail, this is a well-balanced package. We are talking about all existing tenants staying at 2% as per the existing RPZs, which the Opposition wanted retained. They are being retained for existing tenants. We do need supply.
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Surely Deputy Bacik agrees that we need more supply. We need more apartment building and what is needed for that? Certainty. We need policy certainty for renters and investors. That is what this package provides, because we do need private sector investment in apartment building. The final point I would make is that this is but one of a suite of measures that have been taken and are being taken to significantly change the dial in respect of both private sector investment and public sector investment, which we have already announced since the beginning of the year, at up to €800 million worth. Up to today, 83% of all tenancies are within RPZs. We are extending that to 100%. These are good measures. Surely Deputy Bacik should acknowledge that. I do not think she expected it. That is the problem. She declared that it was going to be the end of the RPZs and that is the problem with the Opposition. It has been caught out.
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If the Deputy reads the Housing Agency report - and I invite her to do so in its entirety - and looks at the ESRI analysis of the rental market, in reviewing both the domestic and international literature and so on, she will see there has been a negative impact, particularly in 2021, on measures we took on supply into the residential market. That is in the report. There must be a balance. I take it the Deputy wants investment into the private sector. If one does not tie it or give people certainty about the CPI, why would anyone invest in the future if they could endure a loss? People are not going to do that. We need a bit of practical reality here. That is the point. The balance has to be right and we have got that balance right while protecting tenants to an even greater degree-----
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-----than had been the case, on top of protections which we brought in over the past number of years. Over the past number of years stronger and stronger protections have been brought in for tenants and renters. That will continue under this measure and will be even stronger again in return-----
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Existing tenancies are capped and will remain capped at 2%.
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Yes, that is what it says.
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Deputy Ó Broin will have a chance later. The fundamental objective is twofold: policy certainty and protection for renters and increased supply. I respect Deputy O'Callaghan's commitment and interest in this, but he and his party have been very weak on the supply side. All of its proposals over the past three years, cumulatively, would reduce supply and do nothing to increase it. We have a fundamental challenge as a society. We need 50,000 new houses per annum. We are at approximately 30,000. It might be higher this year; we do not know. It is 30,000 plus. Back in 2019, it was 20,000. State investment has largely brought it up to approximately 30,000 houses plus. We need significant private sector investment. The overall investment required is approximately €20 billion to get to 50,000. That will not be provided by the State alone. Institutional and pension funds have a role. The Deputy's party may say they do not. I do not see how else to get to 50,000 new units. He might call them vultures. That is part of the problem in the political narrative. It has undermined the entire debate on housing. Pension funds invest and the State invests and will invest more. We are investing at an unprecedented level, from a State point of view. If we look at the table, the majority of landlords or people who rent out are not institutional investors. In fact, over the past three or four years, there has been precious little institutional investment of the scale required. The vast majority are tenancies of four, three, two or one in the rental market. We need a more dynamic and sustainable rental market for the future. This package facilitates that and gives certainty to enable more investment in addition to keeping all those in the market at the moment. It cannot all be replaced by 100% State-constructed or State-rented housing. We do a lot on rent through the housing assistance payment, HAP, local authority rents and so on.
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The involvement of the State is enormous. It has to be balanced and supplemented with significant private sector investment. This is just one measure. On its own it will not do it. It will need to be accompanied by other measures. Last week, we took a decision to legislatively roll over planning permissions that might have been delayed by judicial reviews to keep supply going. It has to be about supply. From the Opposition in general, proposals on the supply side have been extraordinarily weak and not forthcoming on how to get from 30,000 a year to 50,000 a year.
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First, the one proposal the Deputy's party has come forward with is the savings incentive scheme.
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I will answer the question.
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The scheme the Social Democrats came forward with would take years to accumulate the funding for investment. It would not produce a single house over the next three to four years.
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In respect of Finland, the Deputy is correct.
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I am answering the question.
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Three points were made. I am going to deal with them. The second one was on institutional investment. Finland is a good example of where institutional investment had a huge impact on house construction and apartment construction.
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Third, Germany is a bad example-----
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-----of where the rent pressure controls the Deputies are advocating created a huge decline well below the market rate. There are many tenancies at the moment-----
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-----well below the market rate. If some tenant exits-----
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If a tenant exits that-----
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Ceann Chomhairle, there has been repeated interruption-----
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If there had not been interruption, I could have dealt with all four points.
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No it does not.
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But the Deputies announced that march before the proposal was even announced.
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That sums it up. The Deputies just change the narrative every time it suits.
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The bottom line is if you are an existing tenant there will be no change.
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It is as simple as that. There will be no change if you are an existing tenant, okay.
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There is no reset at six years for an existing tenant. However, if-----
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New tenancies, new builds and new apartments that will come on stream, hopefully, because this is about supply. With the greatest respect in the world, if we had adopted half of what Deputy Murphy proposed we would have no supply at all in the market. That is the fundamental difference. We need more apartments, we need more houses and we need more in the rental market. In many instances, when the RPZs originally came in, many people were still well below market rates. If a tenant exits voluntarily and leaves, the tenancy can then reset to market rate. In my view that is reasonable.
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When RPZs came in first, many people did not increase their rents. Quite a number did not. To keep momentum in the market and to keep people in the market, that is a balanced response to the current situation. We want to bring more investment in to build-----
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It is capped at 2%. The second cap is CPI. Basically, there is a cap of whatever the inflation rate is. The inflation rate is forecast to be 2%, on average, for the next number of years. It is also the focus of the ECB to keep inflation at 2%.
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If we do not tie it to CPI and freeze it as the Deputy is saying, why would anyone invest in any new apartment block? Why would anyone build a new house or a new apartment for rent if effectively they would begin to lose money within a couple of years? No one is going to make an investment decision on the basis, as the Deputy is proposing, that we have a rent freeze for three years or longer. No one is going to invest in a market where essentially they invest knowing they will be losing money fairly quickly. The package is about getting a balance to incentivise investment into the rental market, while protecting existing tenants who will not see an increase in their rent. No matter how much the Deputy shouts that, they will not have an increase in their rent above the 2%, which is part of the RPZ and has been for quite a number of years. That is the position. I think these are balanced measures. No doubt the Deputy thought he would be fighting a different sort of proposal. He announced ages ago that we were getting rid of the RPZ. We are not getting rid of the RPZ.
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We are extending it, making it national and giving stronger protections than tenants had before this package, which will be legislated for, was announced.
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That is what I said.
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You deliberately-----
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It is interesting that in the exchange the Deputy acknowledged that it is new tenancies.
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I have been saying since I came in that existing tenants would not have their rents increased beyond 2% as per the RPZ.
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The Deputies are interrupting because they do not like the facts. The bottom line in respect of new tenancies is yes, in respect of tenancies where the tenant has left so the tenant does not get exorbitant increases. The balance here is that we need more investment into the market. I know the Deputy does not really believe in that.
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The Deputy believes it should be the State in its entirety. That is a fundamental difference. I argue that if we were to take the Deputy's policies, we would have no new supply at all. That is a fundamental difference. I acknowledge that. The Deputy does not believe in a market-based economy. That is his position.
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I happen to believe in a balanced economic framework where you have public sector investment, and we have unprecedented levels of State investment. However, you will need private sector investment to get the level of investment we require. I do not think the State can sustainably spend €20 billion per annum on housing alone. That will not suffice. I do not think the people want that sort of approach either.
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